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CIL initiates steps to wind up operations

Ambarish Mukherjee

NEW DELHI, July 12

PUBLIC sector giant Coal India Ltd (CIL) has initiated steps, in line with the recommendations of the Expenditure Reforms Commission, to dismantle itself and give autonomy to the subsidiary companies while regulatory control will be vested with the Minis try of Coal after CIL is wound up two years down the line.

According to the minutes of the meeting of the Chairman and Managing Directors (CMDs) of CIL subsidiaries held on June 2, a copy of which is available with Business Line, it has been decided that the permanent system of linkage and sponsorship will be do ne away with. For that, CIL will give a three months' notice in the print media indicating the appropriate alternative arrangements for supply of coal which will be made by the concerned coal companies.

Individual intimation to this effect would also be sent by the coal companies to the linked customers where they are linked for drawing their coal supplies.

It has also been decided that the coal companies would make certain quantity of coal available for other customers, mainly small customers. This coal will be sold by adopting suitable norms. Individual coal companies, while formulating such sale schemes, will get it vetted by CIL before implementing the scheme.

The price of coal including terms and conditions for sale to the non-core sector will be decided by the board of the individual coal companies which will be vetted by the CIL.

It has also been decided that the whole process would be reviewed after one year.

As a follow up, the front offices of the coal companies in various steel and power plants are being shut down.

The path to be followed for winding up CIL as the holding company, to be done in three stages, as recommended by the commission, will be completed in two years.

In the first stage, the regional offices of CIL as also as the offices of the various group companies in Calcutta would be wound up. CMPDIL will be restructured as an independent technical advisory body.

The authority for making commercial decisions would be transferred to the seven coal companies of CIL within a year and a major programme for work force rationalisation in the various collieries would be launched immediately. It was decided that the fund s required for voluntary requirement schemes should be met, initially by utilising the profit making subsidiaries and later from the productivity gains accruing to all the companies.

In the second stage, at the end of the first year, all the seven subsidiaries of CIL should be made independent companies allowing them to function without interference from CIL and competing with each other in the market.

All operational aspects such as coal pricing, sales and marketing, purchase of all types, wage negotiations, imports and international contracts of all types, foreign travel, control of executive cadre transfer, posting and recruitment of below board lev el positions etc would be handled directly by the subsidiary companies.

At this stage, since the individual companies are being empowered to undertake the wage negotiations on their own, the Joint Bipartite Committee for Coal Industry (JBCCI) could be wound up. The public sector companies and those which may come up in the p rivate sector could have an association on the lines of Cement Manufacturers' Association, Indian Banks' Association etc to take a coordinated view of common matters including wage policy and the likes.

CIL, as a holding company, besides management of the cash surpluses in a pooled manner to meet the requirements of the losing companies without switching back to Coal Price Retention Account, would undertake only non-commercial and coordination related a spects namely, perspective/long term planning, laying down general guidelines for long term coal supply contracts, vigilance matters and pushing through the man power rationalising schemes.

In the third and the most important stage, which will be at the end of the second year, CIL would be wound up delegating most of its remaining functions also to the subsidiary coal companies and vesting in the Ministry of Coal those functions that cannot be delegated.

The decision, according to a senior CIL official, appears to be taken in haste keeping in view that the Coal Mines (Nationalisation) Amendment Bill 2000 is still lying with the Parliamentary Standing Committee on Energy.